How costly are letting agents?
Due to financial circumstances I am moving back in with my parents who live in Cork while renting out my Dublin apartment. Travel between the two will be awkward and I understand that some letting agents charge a fee to manage tenants on your behalf. How much would I expect to pay for this service and are there any downsides?
The cost of property management services varies, but you can expect to pay around 10pc of the annual rent. Getting a good agent is vital as it is them you want your tenant to call, rather than you, if something goes wrong.
Many local estate agents offer this service, but do ask to speak to such agents' existing clients to get an idea of how hands-on they are.
Some agents offer a letting service usually for about a month's rent and this includes vetting of tenants, checking of references, collection of deposits and signing of leases.
Others also offer a tenant management service which includes follow up when rents are unpaid, property inspection and dealing with tenant complaints. They can also arrange repair and maintenance services through third party suppliers.
The plusses are that you don't have to be personally involved with your tenant. Naturally, you'll have to weigh the costs against the rental income, but it may prove worth paying for the convenience.
I'm beginning to fall behind on my mortgage and missed last month's payment for the second time in a year. To be honest, the main problem isn't the mortgage itself, but my other loans and in particular, my credit card which I put Christmas on. I'm at my wits end and am afraid the bank will start hassling me.
You're not alone. The level of personal debt in Ireland is extremely high – conservatively €8,500 per household, according to the latest Central Bank statistics. Car loans, credit union debts and credit card bills account for much of this – the average credit card debt for instance, is over €1,400.
The interest charged on these types of loans can be multiples of that charged on mortgages, so it's tempting to forego one for the other. First of all, list out your debts with those charging the highest interest rate at the top. Seeing them in writing with corresponding payments can clarify priorities.
Next, see how much you can afford to pay each. Robbing Peter to pay Paul isn't a great idea as you will fall behind. Negotiating a lower, but guaranteed, payment to everyone is better.
Bear in mind that personal debt is largely 'unsecured' – that is, the lender can't automatically repossess your assets. This is why you're charged more.
Five Irish banks recently signed up to a code which agrees to write off unsecured debts by up to 80pc as long as customers commit in full to mortgage payments for five years.
You will need to complete a Standard Financial Statement outlining your income and expenditure, but ask your mortgage bank to help with this. They should then contact other lenders on your behalf to renegotiate other debts. You can also get helpful advice from your local Money Advice Bureau or www.mabs.ie.